Accomplished investors know the key data points that can have a strong impact on a company valuation (or stock price) – what to look for when dissecting the quarterly profit/loss, cash flow, and balance sheet statements. For instance, fundamental metrics such as gross profit margin growth, pure operating margin growth, cash flow yield, debt to capital ratio, operating return on capital, etc., are some of the varying components that provide valuable insight into the bottom-line performance, and management competence, within a business…

The challenge is in knowing how to bring together these initially fragmentary core metrics into cohesive, fully integrated formulae, which combine logic and reason into identifying successful businesses, which provide potential deep-value and growth trading ideas/opportunities…

Let Us Do The Math…

Identifying newly unfolding trade ideas, and putting capital to work, is what we do every day…

For each of the three strategies, this initial screening process, applied to all five hundred S&P stocks, objectively narrows down our universe to ‘qualifying’ companies we further rank into a sort order which places the topmost, or select 8, stock trading ideas at the top, for each strategy.

The Four Week Portfolio Refresh…

The process is applied every four weeks, which we have found to be a good balance in capturing regularly unfolding trading ideas, without over-trading. For each of the three strategies, qualifying companies are ‘ranked’ (ie., the ‘top 8’ stocks) by precise metrics. These are: ‘Free Cash Flow to Enterprise Value yield’, ‘Free Cash Flow margin growth’, and ‘strong volume-flow’ (increases in institutional, or ‘smart money’ flow), respectively.

When these factors are combined into a logical, fully reasoned trading ‘plan of action’ which invests in the top-most ranked stocks every four weeks, focusing only on high-liquidity S&P stocks, which are further fully hedged during a down-trending stock market, we are able to deliver consistently proven, documented market beating returns, on each of the three distinctive trading strategies.

A Trading Plan You Can Emulate…

Every four weeks, members receive all the information necessary to emulate our positions, should they wish to do so. Subscribers can look at a specific stock trading idea within any of the three strategies if they wish, or copy an entire strategy-portfolio of their choice. Or simply observe, witness and build confidence in the method (outlined above, and further detailed in the How We Trade page).

The report is published every four weeks, on a Sunday, ready for entering new or exiting old positions in the next market session. This includes the top 8 select stocks for each of the three strategies.

Trades are always held for the full four weeks without interruption. This means once we enter trades, we do not touch the positions until the next rebalance four weeks later. This is a reasonable holding period which we have found in our own trading, to provide a healthy balance between capturing quality value/growth opportunities, without over-thinking and impulsive/excessive over-trading.

Sidenote: The Importance of Liquidity…

As we are focusing specifically on the S&P 500 universe, we are trading only the most liquid stocks. This enables us to share our stock picks for all three trading strategies, without any conflict of interest…

Liquidity plays a critical role in allowing us (and our members) to enter and exit trades with ease, and without competing with each other. Put simply, the stock price in any high-volume S&P 500 company is not likely shoot up on a Monday morning because every member is trying to purchase shares simultaneously, as can be the case with low-liquidity/low-volume stocks (such as small/micro cap and penny stocks)…

As a quick example, popular S&P stocks like Boeing Co (BA) and Micron Technology Inc (MU), traded an average dollar volume of $1.89 Billion and $2.12 Billion worth of shares respectively, each day, in the past 10 days (at the time of writing). This level of volume allows for healthy market efficiency and ease of entering/exiting trades, with tight bid/ask spreads (difference between buy/sell prices), as well as absorbing multiple orders at the same time.